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Sustainability is the new normal: why SMEs need to embrace the green revolution

So what is climate change?

Essentially, it's the long-term changes in the Earth's climate caused by human activities like burning fossil fuels and cutting down forests. These activities release greenhouse gases like carbon dioxide into the atmosphere, trapping heat and causing the Earth's temperature to rise. This warming can lead to a range of impacts, including rising sea levels, more frequent and intense heatwaves, droughts, floods, and storms.

And why should SMEs care about climate change?

For one, the impacts of climate change can disrupt supply chains, damage infrastructure, and cause financial losses. For example, extreme weather events can disrupt transportation and energy networks, making it difficult for businesses to deliver products to their customers. Climate change can also lead to higher insurance premiums, increased regulatory requirements, and reputational risks. But on the flip side, SMEs can also benefit from acting on climate change. Embracing sustainable practices can reduce costs, improve efficiency, and attract new customers. For example, consumers are increasingly demanding sustainable products and services, which can create new market opportunities for SMEs.

What can SMEs do to prepare for climate change?

There are a few steps they can take, like:

And there are also some green business models that SMEs can adopt, like:

Circular Economy: This involves designing products and services that minimize waste and maximize the reuse and recycling of materials. This can create new revenue streams by turning waste into a valuable resource.
Green Supply Chains: SMEs can work with their suppliers to reduce greenhouse gas emissions and environmental impacts across the supply chain. This can create efficiencies and cost savings, as well as new market opportunities for sustainable products and services.
Sustainable Agriculture: SMEs involved in agriculture can adopt sustainable farming practices, like agroforestry or organic farming, to reduce their environmental impact and improve soil health. This can lead to new market opportunities for sustainably grown products.
Green Transportation: SMEs can adopt green transportation solutions, like electric vehicles or cycling, to reduce their carbon footprint and save on transportation costs. This can also create new market opportunities for green mobility solutions.
Sustainable Tourism: SMEs involved in tourism can adopt sustainable tourism practices, like eco-tourism or responsible travel, to reduce their environmental impact and improve their reputation. This can lead to new market opportunities for sustainable tourism experiences and accommodations.

It's important to note that transitioning to sustainable business practices is not an overnight process. It requires a commitment from SMEs to integrate sustainability into their core business strategy and operations. It may also require investment in new technologies or processes, and engagement with stakeholders to drive change.

But the benefits of sustainable business practices can be significant, not only for the environment but also for the bottom line. Adopting sustainable practices can help SMEs reduce costs, improve efficiency, and attract new customers. It can also help SMEs prepare for the impacts of climate change and build resilience for the future.

This article is just an introduction to the topic of sustainability for SMEs. In future articles, we will explore various aspects of sustainability in more depth, including topics like sustainable finance, green marketing, and employee engagement. By working together to build a more sustainable future, SMEs can play a critical role in addressing the challenges of climate change and creating new business opportunities.

These knowledge articles have been developed in collaboration with the European Bank for Reconstruction and Development (the EBRD). The EBRD is committed to supporting small and medium-sized enterprises’ sustainability efforts and accelerating the transition to clean energy in the regions where it works. For more information about how the EBRD can help your business’ journey to net-zero, please contact your regional office found here.

EBRD is partnering with I-GO Assistant to support SMEs’ sustainability efforts with a free-to-use resource efficiency assessment and navigation tool designed and managed by the Green Industry Platform.

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